"The Democrats' tax cut gamble" - Soliciting responses

This is from today's Boston Globe by Scott LeHigh.

I think the points in the article are worthy of debate, and(though I don't know for sure) I don't think the Globe is a conservative source. A quick google of LeHigh shows a couple neo-cons slamming him over being too liberal, and the Globe's other editorial today is "Barbour campaign shows GOP's racist side". So I suspect this is an issue that we need to address.

IT'S TIME for Democrats to ask themselves Dirty Harry's piercing question. Do you feel lucky?

If the party is lucky, a year from now any alternative economic plan will seem preferable to George W. Bush's approach. But if the nascent economic recovery takes hold, it's likely that the best Democrats can expect in 2004 is a close, competitive election.

In such a contest, the nominee's position on taxes could prove critical.

On that issue, the Democratic field is divided between the hopefuls who favor total repeal of the Bush tax cuts and those who want to rescind the breaks only for upper earners.

- snip -

What middle-class tax cut?" Dean asked in Sunday's Democratic debate in Detroit. "On the average, 60 percent of the people in this country got a $304 tax cut."

Averages, however, are deceiving, because any such average includes the quarter of households that pay little or no income tax -- and thus got little or no break.

EDITED BY ADMIN: COPYRIGHT

http://www.boston.com/news/politics/president/articles/2003/10/29/the_democrats_tax_cut_gamble/



I tend to agree with lots of this (and it isn't an attempt to slam either candidate). I don't think we can be sucessfull spinning the tax cut as entirely for the rich. Of course, I look at it from a personal perspective, my federal taxes went down significantly and I'm certainly not rich.

I think trying to spin the cut as entirely a benefit for the rich will cause millions of voters who might otherwise agree with the message to think "I got a big tax cut, they must think I'm rich - so when they talk about raising taxes on 'the rich' they must mean me".

If the Boston Globe and the g.d. "liberal media" would actually report on Chimpy's constant pathological lying and most-corrupt-in-history adminstration, maybe we wouldn't have to count on "feeling lucky," and maybe we could simply count on an informed electorate to make the right decision. NO ONE would vote for this man if 1/10th of what he's done actually made it to the front page of your local papers.

Lucky? No...how about, "Do you feel screwed?"

.... could you adress whether the tax policy hinted at by some of our better candidates is a mistake?

I think the author's point and the point of the poster was that we are helping to screw ourselves. If a politician gets himself into the position of supporting a position that is not main stream before he is elected, he will likely never be elected.

This meant Clinton had to claim he would lower middle class taxes until a week or two after he took office, then come out and admit it couldn't (and shouldn't) be done. Similarly, bush* had to conceal or at least reduce the impact of his christian beliefs until after he was in office.

The current group of Democrat presidential hopefuls are taking two positions that are not held by a majority of likely voters in the eventual presidential election. These postions are; that we should pull out of Iraq and that we should roll back the bush* tax cuts. I know that most of the people here at DU believe these are both good positions to take. However, if they keep our candidate from being elected because the majority of Americans disagree, they are not good positions to openly endorse.

You mean if the economy continues to fail, we are lucky?? What we desperately need is to educate the public about taxes. Too many people have bought the argument that lower taxes are better. Well, we've tried it both ways, to steal a line from the article. When senior Bush raised taxes and when Clinton raised taxes, the economy took off and nearly everyone did better (even the rich). When Raygun and chimpy-Bush lowered taxes, the economy went into a tail spin. So, taxes are bad? Giving the rich money from the national treasury not only does very little stimulating or trickling, it also gets nothing in return for the country. If we're going to give Bill Gates $200,000, the least we could expect is a few computer programs in return. That's called spending. Handing out the national treasury and getting nothing in return is not such a good deal for the society. Spending at least gets us goods and services, AND gives money to people. What we need is education.

I'm not sure what "education" you refer to.

It simply isn't "Bush/Clinton" raised taxes and we prospered, this Bush cut taxes and we got screwed." It sounds "sound-bitable" but the problem is that it isn't true (or at least isn't that simple).

The economy wasn't doing particularly well at the end of poppy's term (remember the election we won? "it's the economy - stupid!". And the recent downturn can be argued as the start of shrub's term or the end of Clinton's, but it certainly started LONG before shrub ever cut any taxes.

We also can't afford to count on things NOT picking up by the elction. If 3Q numbers come in at 6-7% growth, it looks like it will be hot for the next year at least. What tax increase can we plant that on? How do we spin the tax decrease as ineffective in that environment?

that a good deal of the trouble we are in is due to Bush tax cuts. The economy was not in recession when Bush took office, that is repug propaganda. The economy was doing worse because repugs took office in 1994 and slowed Clinton's tax increases for the wealthy. Giving money to wealthy people does not stimulate the economy because they are already spending as much as they want (they are rich). New studies show that they also are not investing because they do not see the stock market coming around. They are putting their money into foreign banks where it is safe from taxation (except for the contributions to the Bush campaign). We need an increase in taxes and spending to spur the economy. The increased taxes should come from the wealthy. The spending should go to middle class and poor people who will spend the money. This will create jobs and wealth and everyone will do better.

Generally, a recession is defined as 2 consecutive quarters of negative GDP growth. I got the GDP growth numbers below from dismalscientist.com (an economists' website run by economy.com).

It shows the first of three negative quarters beginning with 2001Q1, which of course is the quarter that Clinton left/Bush entered.

Blaming or crediting presidents with this sort of thing is asinine, but as it seems to be quite popular at the current time, I thought I'd add some facts.

2000Q3 0.56
2000Q4 1.1
2001Q1 -0.6
2001Q2 -1.59
2001Q3 -0.29
2001Q4 2.74
2002Q1 5.04
2002Q2 1.25
2002Q3 4.03
2002Q4 1.38
2003Q1 1.43
2003Q2 3.28

Do you expecet the population to be shocked that he gives the party line?

Anything good is because of "us" anything bad is because of "them".

Of course it's hogwash (from both sides).

"The economy was not in recession when Bush took office, that is repug propaganda. The economy was doing worse because repugs took office in 1994 and slowed Clinton's tax increases for the wealthy."??? But we had the best economy in decades under Clinton, and none of it started until those last six years. So they implemented some policy that didn't effect the economy until 6 years after they enacted it? The 2000-2001 start of the slump is due to soemthing they did years before? But the current Bush cuts somehow hurt the economy before they were enacted?

You have a funny notion of macroeconomics and fiscal policy.

effective with swing voters and fence-sitting dems, it has no place on DU. We're going to vote for the good guys and don't need prodding with questionable economic logic.

Those of us that understand economics, especially the lagging nature of econometrics, know the economy was trending up when Clinton took office and trending down when he left.

The credit and blame go to noone in particular; the damned economy is cyclical. Timing may have had as much to do with it as any tax regime or spending program.

The economy (meaning GDP growth here) will be doing just fine next year in campaign crunch time. That's a promise.

Employment and personal income are the numbers to watch.

3.2% or higher 3Q income growth guarantees the incumbent or his party wins the election in every contest since the Great Depression.

2.8% or lower growth guarantees the loss. In between it's a toss-up.

On the whole, America votes it's wallet.

it is hard to do in a soundbyte. Plus, despite the reality, Democrats have to forever battle the perception that they are tax and spend. Rather than waging a campaign to challenge that illusion, many of the Democrats, keeping with their pattern of playing defense- rather than countering the mindset, attack their own who offer an alternative vision. that makes getting past the obstacles even more difficult.

Who knows what stats reflect a true accounting, but as one poster pointed out yesterday, the pooling of resources benefits all in the long run, and that has to be weighed in the proposal as well.

singles without children got as a tax cut. That would screw their averages.

Married filing jointly ALWAYS got bigger tax advantages than singles. Bush's tax cut just made that gap larger.

The Citizens for Tax Justice has a better view of the sizes of Bush's tax cuts http://www.ctj.org/pdf/2003statecut.pdf

The CTJ number make their point for them.

The CTJ numbers will be recognized by most voters as worthless. Let's see... if the "average" person only gets $122, then the whole tax cut should only cost about $16.3 Billion per year, right? Five years of that costs less than the latest Iraq bill.

Since the bottom rate was cut from 15% to 10%, ANYONE with any real taxale income saved at least $400. To get less than that you had to have taxable income UNDER $8,000. Income under $8,000 is NOT "middle class" it isn't "working people" and it isn't "average voters". It certainly isn't "rich".

But when a young couple with one kid and below "middle class" income get's more than ten times your "average" tax cut they assume YOU think they must be rich.


The additional problem I see is som many posts quoting the figures you link to ignore that it is entirely about the LATEST cuts. Our candidates are talking about getting rid of ALL of the cuts (2001 as well). And the figures look nothing like what you posted.

It couldn't be more dishonest.

It's talking about Bush's "latest" tax cuts, the second of the two he's done.

True, it didn't reduce the rates for people making less than $ 40,000 or so.

But,

That's because they were reduced in Bush's first tax cut.

A new 10 % rate band was carved out of the 15 % band. This helped everyone who paid a dollar of income tax.

If you never got past the 15 % rate, this could have cut your tax by up to a full third.

Also there was the child care credit.

The savings for the lowest bands went into effect immediately. The reductions for the upper brackets (28 % 31 % 39.6 %) were to be fazed in over some years.

Therefore, the second tax cut round just speeded up the faze-ins to fewer years so the 28 % bracket went right down to 25 % instead of going down 1 % a year for a few years.

That's all fine, but ignoring the first round of cuts and saying the lower income tax payers didn't get anything is pretty dishonest when you know they got their's first in the first round of cuts.

I will be very careful whenever I read stuff from this source again. This was dishonest on purpose.

Running on an issue to raise taxes on people earning less than $100,000 a year is a certain recipe for defeat. It is impossible to live in the USA on what the average person makes. Most people are living off of the equity in their houses to make ends meet. People without houses spend every cent they make. Dean should try to live on less than $100,000. If he doesn't change his position he will lose. If I was running I would call for further reductions. This field of candidates is out of touch completely.

Welcome to DU!! :toast:

to distinguish between taxing wealth and taxing wages in a manner that is sound-bite easy to understand.
"The wealth distribution chart below shows that the top 1% own 38.1% of the wealth in the country, the next 4% own 21.3%, and the next 5% own 11.5%. That is to say, the top 10% of the country owns 70.9% of the wealth of this nation!
Ninety percent of the country owns a mere 29.1%."
http://www.therationalradical.com/dsep/wealth-distribution.htm

I remember reading some years ago what the mimimum taxable income would be if it were at the initial rate translated into current $$ - my eyes nearly popped out of my head. It was high enough that probably a majority of the wage earners under the median income would pay no federal income tax. High enough perhaps to allay the fury of the singles on the board who are so outraged at the tax break given to families with children - as if it were that that was breaking the bank.

Democrats need to find some guts on this issue, but since they are mostly in thrall one way or another to big money, I won't hold my breath.

Yes, the rich have lots of money, but regular everyday people should have built up a fair net worth just before they retire. It doesn't make my parent "rich" to have a few hundred thousand saved up for retirement because it took 40 years to get there. But if I had the same net worth in my 20's I might be wealthy.

A system that identifies "ability" and "need" is what we have to come up with. Bigger tax breaks for retirement savings as you approach the final working years, tax breaks (like the recent ones) for young families, some recognition of regional cost-of-living ($75,000 in NC is pretty good - in NYC it might be scraping by).

But rhetoric that it too easily defeated by facts is worthless.